Controlling bankers' bonuses

Residents in Dover & Deal tell me time and again how angry they are about the culture of vast bank bonuses under the Labour Government. I kept up the pressure on this issue in Parliament today, calling for a debate on bank bonuses.

I said: "May I echo the call of the shadow Leader of the House for a debate on bank bonuses? My constituents are enraged that Fred Goodwin got £15 million in bonuses, that knighthoods were thrown about like confetti, and that bank bail-outs encouraged excessive bonuses for the fat cats. We need a change in policy from "everyone out for themselves" and "up with the fat cats," to more "all in it together."

The Leader of the House replied: "I applaud my hon. Friend's sentiments. He was probably in the House when the Chancellor made his statement suggesting a very robust negotiating position with the banks. The Chancellor also indicated during questions and answers that he would want to report back to the House once those negotiations had been completed."

The other day on 11 January I raised the subject of bank bonuses with the Chancellor. He had told the House how Labour secretly encouraged fat bonuses to be paid this year under the contract they'd entered into with the banks before they lost the election. I wanted to know what Labour had done to help small businesses in communities like ours - it turned out the answer was basically nothing. They'd looked after the bankers and forgotten about us!

I said: "The Chancellor has already told the House that under the banking contract, bonuses were actively encouraged by the previous Government for the current year. Can he tell the House whether lending to cash-strapped small businesses was also encouraged under that contract?"

The Chancellor replied: "Nothing meaningful was secured on lending to small businesses by the previous Government at the very moment when they had maximum leverage: when they were bailing out these banks. That is part of what we are dealing with. We are also dealing with the situation in which they bought their very large stake in the Royal Bank of Scotland-as I have said, the deal explicitly says that the bonuses covering the year 2010 should be paid at market rates. I am saying that we want to see the bonus pool smaller and the Royal Bank of Scotland as a back-marker, rather than a front-runner."